District heating: can we fix the plumbing of cities for sustainable futures?

In November 2015 the UK Government announced a £300m capital fund for heat networks – the largest sum ever allocated to this energy infrastructure in Britain. It was something of a surprise. Many people remain unaware of the technology, the reasons why it is considered worthy of investment, or the fascinating conundrums involved in its deployment.

Most of us in affluent societies give little thought to where the heating for our homes, workplaces, shops, leisure centres, libraries (etc., etc.) comes from, or what its combined social, economic and environmental costs are. In British cities, millions of gas central heating boilers rely on a vast, highly regulated and commercially-operated array of hardware to distribute gas extracted from the North Sea and much further afield. But our future access to reliable gas supplies is uncertain, and even more importantly, the evidence of climate change makes it very clear that we need to stop burning gas, or other fossil fuels, if we are to avoid the major risks of climate disruption.

Our recent book Sustainable Urban Energy Policy: Heat and the city discusses what might be done to create more sustainable heating provisions in cities. It explores the emerging policy thinking and practices, particularly in relation to energy saving and heat networks. Even though the UK has strict Climate Change targets in legislation, policy has only recently begun to broaden its focus beyond electricity to include the future of heating, and progress is patchy. District heating networks are one of the solutions which UK Government regards as a way forward, particularly in densely populated areas.

Heat networks: an introduction for newcomers

District heating is well-known in many European countries where it delivers heat to buildings via highly insulated underground pipe networks. Its value as a sustainable heating source is derived from its adaptability to any available source of heat, which can then be shared among numerous users. Some heat sources which would be too difficult to use in an individual building can supply heat networks. In Islington for example, the council is exploring use of heat from the London Underground, and in Shetland, the Lerwick heat network is planning to use heat from sea water, boosting the temperature with an electric heat pump. By shifting heat production out of buildings to shared facilities, heat networks can also result in better integration across energy systems. Heat is much easier to store than electricity, particularly at large scales, so using electric heat pumps with heat networks can contribute to balancing electricity supply and demand: when the wind is blowing but demand for electricity is low a heat network can absorb the excess, as happens in Denmark today.

Heat networks can, however, be challenging to develop, because these systems create long-term interdependencies between suppliers and users. The insulated pipework is costly to manufacture and install, meaning heat networks are typically considered economically viable only in densely populated areas where a large quantity of heat can be delivered through shorter lengths of pipe. We found a variety of perspectives on when a heat network makes economic sense: for example it makes a big difference if the costs are spread over the estimated forty year life of the network, rather than having to be recovered faster. Perspectives on heat network economics are just one dimension of differences which emerge when individuals and organisations consider proposals. These differences matter hugely to efforts to develop district heating, because of the coordinated action required for investment to proceed. In our book we explore the intertwined social, technical and economic issues involved in constructing heat infrastructures in cities. Main messages from Sustainable Urban Energy Policy: Heat and the city:

The future role of heat networks in a sustainable heat system has been given a big boost by the capital investment, and decisions about structuring the fund will be critical to making best use of the money, particularly to ensure that it is a stimulant to much bigger investment from other sources.

UK heat networks tend to be small scale, mainly single user developments, such as hospital and university estates, or sometimes social housing. These schemes reduce the need for coordination across organisations, but nonetheless can still be complex projects. Policymakers and practitioners recognise the additional value of connecting multiple users to shared systems, but this requires learning and collaboration between organisations to solve the problems of sharing costs and benefits; no clear framework currently exists for this.

Energy network development across Europe in the twentieth century was typically organised by either national governments or local authorities under a monopoly model. Efforts to create heat networks in the UK’s contemporary liberalised markets therefore represent a distinct set of issues. Breaking out of a history of piecemeal and fragmented heat network development in the UK will be a key challenge for the Government in using its £300m budget.

We found that local governments have often played a key part in heat network development, even within liberalised markets. But in the UK they need direct powers and more resources to make them more effective intermediaries.

In contrast with gas and electricity networks, heat networks in the UK are unregulated. While some stakeholders argue that regulation could stifle a nascent industry, the contrast, particularly with gas, has important consequences. In the absence of regulation investment is difficult to secure because of persistent uncertainties about future connections to a heat network and competing technologies. The regulatory protection of the gas network contributes to its perception as the most affordable and reliable means of heating. We know many of the technical solutions for sustainable and low energy heating, but we need the social infrastructures to make the necessary decisions and investments. We need higher standards of energy efficiency for producers of waste heat, a loan guarantee scheme for low carbon infrastructures such as heat networks, regulation to support local heat markets and to ensure fair heat tariffs, and openness to a range of business models, including community and mutual enterprises.

Heat and the city

Minimising the most severe risks of climate change means ending societal dependence on fossil fuels, and radically improving the efficiency with which we use all energy sources. Such deliberate transformative change is, however, without precedent.
Sustainable Urban Energy Policy debates the major…